Explosion kills 13, flattens village in Ghana mining region

By Cooper Inveen and Christian Akorlie

APIATE, Ghana (Reuters) -At least 13 people were killed and scores injured when a truck carrying explosives to a gold mine in western Ghana detonated, flattening a rural community, the police said on Friday.

Smouldering timber and torn-up sheet metal marked where hundreds of houses had stood in Apiate, a settlement about 200 km (130 miles) west of the capital Accra. Thursday’s blast left a crater roughly 20 meters (66 ft) wide. Doors and roofs were blown off other buildings, a Reuters reporter at the scene said.

Rescue workers combed the site while excavators dug through the larger piles of dirt and debris.

“We’ve seen damage to lives and property here that is just indescribable,” said Daniel Adu-Gyamfi, a student from a nearby mining college who came to volunteer with the response team.

“Yesterday … you could see human remains all over the place.”

About 180 people were injured by the explosion, police said.

In a video apparently filmed by a bystander in Apiate, people can be seen walking towards a fire on the side of the road when a powerful explosion ripped through the settlement.

It was not immediately clear what caused the accident. Police said a motorcycle crashed into the truck, then caught fire, and a government statement suggested a roadside power transformer could have played a role.

The truck was owned by a Spanish company called Maxam that was transporting explosives to the Chirano gold mine, run by Toronto-based Kinross Gold Corporation, police said.

The ministry of lands and natural resources said in a statement that Maxam would be suspended from manufacturing, transporting or supplying explosives for mining operations pending the outcome of investigations into the incident.

The ministry also ordered the suspension of Ghana’s chief inspector of mines, who is responsible for supervising explosives use in the sector.

Maxam, which has 140 subsidiaries operating in more than 50 countries, has not responded to requests for comment.

Kinross said it planned to provide support to the response efforts and relief items to those affected.

Kwesi Ofori, director of public affairs for the Ghana Police Service, told reporters earlier on Friday that the transport of the explosives had followed proper procedure, and the truck had a police escort.

Police are treating the site as a crime scene while they investigate, he said, without providing details.

QUICK EVACUATION

The death toll could have been much worse.

There was a pause between the collision and the explosion, which gave the driver time to tell the community that they were in danger, said police spokesperson Ofori.

Teachers in a nearby school were among the first informed, and evacuated the children.

“(The driver) also announced to most community members to move out, including the moto rider,” Ofori said.

The government earlier on Friday said the death toll was 17, mistakenly counting four people who are alive but in critical condition, Ofori said.

In a visit to Apiate, near the towns of Bawdie and Bogoso, Vice President Mahamudu Bawumia applauded the rescue efforts and said the government was working to set up temporary housing for those who lost their homes.

“We will learn lessons and those are going to be much later on. For now we are very concerned about how to complete this rescue effort,” he said.

(Reporting by Christian Akorlie and Cooper Inveen; Additional reporting and writing by Nellie Peyton, Edward McAllister and Aaron Ross; Editing by John Stonestreet, Frank Jack Daniel and Daniel Wallis)

Bond yields tumble as Netflix fuels stock market sell-off

By Herbert Lash and Tommy Wilkes

NEW YORK/LONDON (Reuters) -Risk aversion dominated markets on Friday as stocks slumped on Wall Street and in Europe, oil prices fell from seven-year highs earlier in the week and bond prices surged with traders scurrying for the relative safety of government debt.

Poor subscriber growth reported late Thursday at Netflix Inc sent its shares plunging 21.8% and cast a pall over a market already shaken by concerns the Federal Reserve will tighten monetary policy too aggressively to fight inflation.

Investors are waiting for details from the Fed’s policy meeting next week on how it will proceed at a time that inflation is such a hot political issue it could force a more hawkish stance.

Data, however, won’t begin to show an expected slower pace of rising consumer prices for at least a few months, making Fed Chair Jerome Powell’s job more difficult as he tries to calm markets.

“We know the Fed is beginning to pivot and the problem is that the inflation numbers are not going to start to trend lower until later this spring,” said Andrew Slimmon, a managing director at Morgan Stanley Investment Management.

Despite the negative Netflix earnings, it’s too early to know whether corporate fundamentals won’t continue to be strong, he said.

In Europe, the German, French and Italian indices fell almost 2%, with the broad Euro STOXX index of 600 leading regional companies closing down 1.84%. MSCI’s all-country world index fell 1.74%.

On Wall Street, the Dow Jones Industrial Average slid 1.30%, the S&P 500 fell 1.89% and the Nasdaq Composite lost 2.72%. Both the S&P 500 and the Nasdaq posted their biggest weekly declines since the market crashed in March 2020.

With the Fed posed to hike interest rates as many as four times this year, fear of a hard landing has risen among investors. But a slowing economy in the months ahead will probably give the Fed second thoughts, said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC.

“By the time we get to the second rate hike, everything will be rolling over enough that everybody will back off from these calls,” he said. “The growth numbers will be slowing much more quickly than the Fed anticipated.”

U.S. Treasury and euro zone government bond yields fell as concerns about potential conflict in Ukraine also dented risk appetite and stock market drops increased demand for the debt.

The yield on 10-year Treasury notes fell 7.2 basis points to 1.762%, a sharp drop from a two-year high of 1.902% touched on Wednesday.

Markets overnight in Asia were broadly lower, including in China where benchmark mortgage rates were cut on Thursday in the latest move to prop up an economy soured by its property sector.

The U.S. dollar edged lower with U.S. Treasury yields, with investors looking to next week’s Fed meeting for more clarity on the outlook for rate hikes and quantitative tightening.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.138% to 95.627. The yen was last down 0.40% at $113.6300. The euro was last up 0.30 percent at $1.1344,

Oil prices slid for a second day, pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after global oil benchmarks touched seven-year highs.

Brent crude futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while U.S. futures settled down 41 cents at $85.14 a barrel.

Gold was set to gain for a second week as inflation and geopolitical risks lifted its safe-haven appeal, but it slipped on Friday amid a broader decline in commodities.

U.S. gold futures settled down 0.6% at $1,831.80 an ounce.

(Reporting by Herbert Lash, dditional reporting by Sujata Rao in London and Kanupriya Kapoor and Stella Qiu in Singapore; Editing by Raissa Kasolowsky, Kirsten Donovan, Alexander Smith and Jonathan Oatis)

Serbian government blasts green groups for scuttling Rio’s lithium project

By Aleksandar Vasovic

BELGRADE (Reuters) – Serbian politicians on Friday blasted environmentalists for forcing them to scuttle Rio Tinto Plc’s proposed $2.4 billion lithium project, warning the move could hurt efforts to grow and diversify the Balkan country’s economy.

Environmentalists, though, having scored a victory after the government bowed to pressure and revoked Rio’s lithium exploration licences on Thursday, are now demanding a moratorium on lithium mining before expected elections in April to ensure the decision is not reversed afterwards.

Zorana Mihajlovic, Serbia’s mining and energy minister, said late on Friday that Belgrade acted to fulfil the requests by various green groups to halt the Jadar lithium project, but accused them of injecting politics into environmental issues.

“The government showed it wanted the dialogue … (and) attempts to use ecology for political purposes demonstrate they (green groups) care nothing about the lives of the people, nor the industrial development,” Mihajlovic told reporters.

The country’s populist ruling coalition, led by the Serbian Progressive Party (SNS), has come under fire for backing lithium and copper mining, eroding the comfortable majority won in a 2020 vote.

The decision is a major setback for Rio, which was hoping the project would help make it one of the world’s 10 biggest producers of lithium. China is the world’s largest consumer and processor of the metal, and various European countries have been working to boost their own output.

Rio last month said it would buy a second lithium asset for $825 million in Argentina, as it looks to build its battery materials business.

The European Battery Alliance, a network of electric vehicle supply chain companies formed by Brussels, said the Jadar project “constituted an important share of potential European domestic supply.” Serbia is not a member of the EU, though it hopes to join the bloc in coming years.

“It would have contributed to support the growth of a nascent industrial battery-related ecosystem in Serbia, contributing to a substantial amount to Serbia’s annual GDP,” the alliance said in a statement.

Rio’s shares in Australia closed down 4.2% on Friday. While in London, Rio’s shares ended down 2.2%.

Thousands of Serbians blocked roads in protests against the government’s backing of the project in recent months, demanding Rio leave the country and forcing the local municipality to scrap a plan to allocate land for the facility.

More protests are scheduled for Saturday in the town of Loznica in western Serbia where the mine was to be built, said Ljiljana Bralovic, one of the protest leaders.

“We want not only to see Rio Tinto out (of Serbia), we also want a permanent ban on the exploitation of lithium and borates,” Bralovic said.

Aleksandar Jovanovic Cuta, another protest leader, said green groups would prevent any future government’s attempt to negotiate a new deal with Rio Tinto after the elections.

“Anyone who tries to do that is crazy, all of Serbia would pour to the streets,” he said.

SUPPLY SHORTAGE

On Thursday, Rio said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.

The Australian government said it regretted Serbia’s decision.

Relations between Belgrade and Canberra have soured after Sunday’s deportation of Serbian tennis star Novak Djokovic from Australia over its COVID-19 entry rules.

Djokovic spoke out in support of “clean air” in a December Instagram story post captioning a picture of the anti-mining protests, which was published by The Bridge, a digital sports platform.

Rio has already spent $450 million in pre-feasibility, feasibility and other studies on Jadar to understand the nature of the deposit, the company said in a project fact sheet in July.

“The level of opposition to it has really ratcheted up over the last six months,” Credit Suisse analyst Saul Kavonic said of the Jadar mine.

“We’ve been highlighting for a while now there would be about $2 a share at risk if the government cancels it.”

At full capacity, the Jadar mine was expected to produce 58,000 tonnes of refined battery-grade lithium carbonate a year, making it Europe’s biggest lithium mine by output.

Experts said the world’s shortage of lithium had been forecast to last for another three years at least, but with the cancellation of the Jadar project, the shortfall would be exacerbated.

“We’re at the point now where lithium supply is going to set the pace of electric vehicle rollout,” Kavonic said.

Robust global demand for the metal far outstripping supply growth has boosted lithium prices in recent years.

Lithium futures, which started trading on the CME in May last year, have jumped 171% to a record high of $38/kg on Thursday, according to Refinitiv data.

(Graphic: Benchmark lithium hydroxide prices surge to record highs on global demand boom, https://fingfx.thomsonreuters.com/gfx/ce/byvrjmyoyve/GlobalLithiumPrices.png)

(Reporting by Aleksandar Vasovic and Ivana Sekularac in Belgrade, Sonali Paul and Praveen Menon in Melbourne; additional reporting by Clara Denina in London and Florence Tan in Singapore; writing by Praveen Menon and Ernest Scheyder; Editing by Kenneth Maxwell, Raju Gopalakrishnan and Paul Simao)

U.S., EU downgrade metal tariff dispute at WTO

GENEVA (Reuters) – The United States and the European Union have downgraded their dispute at the World Trade Organization over steel and aluminium tariffs applied by former U.S. President Donald Trump in 2018 and subsequent EU retaliation, documents filed at the WTO show.

The two sides agreed in October https://www.reuters.com/business/aerospace-defense/eu-us-end-clash-over-steel-aluminium-tariffs-work-global-deal-2021-10-31 to suspend their tariffs and work on a deal to combat “dirty” production and overcapacity in the industry in the next two years, with China clearly the focus of their attention.

Each agreed then to pause the WTO panels deliberating over the Trump tariffs and the subsequent EU counter-measures, which took the form of tariffs on a range of U.S. products including whisky, power boats and Harley Davidson motorbikes.

Documents filed with the WTO on Friday show that Washington and Brussels have now decided to terminate panel proceedings and move to a more informal and seldom used route of arbitration.

The two sides aim to agree on arbitrators, which could include members of the existing WTO panel, and then immediately and indefinitely suspend their work. In any case, they would not start work before Nov. 1.

Parties to arbitration can set their own rules and procedures and define the issues in dispute, but they have to agree that the decision of the arbitrators is final.

(Reporting by Philip Blenkinsop; editing by David Evans)

LME chief Chamberlain steps down to move into cryptocurrencies

By Zandi Shabalala

LONDON (Reuters) -London Metal Exchange (LME) Chief Executive Matt Chamberlain will step down in April, the exchange said on Friday, in a surprise move after five years at the helm of the world’s largest market for industrial metals.

Chamberlain, a former banker who has been at the LME for nine years, has taken the top job at digital asset custody services provider Komainu, his new employer said.

Komainu, launched in 2020, is a joint venture between Japanese bank Nomura Holdings, digital asset security firm  Ledger and digital asset investment house  CoinShares. It safeguards about $5 billion in bitcoins and other cryptocurrency assets on behalf of financial institutions.

While at the LME Chamberlain initiated many changes, including boosting the role of electronic trading to increase flagging volumes.

Last year he proposed closing the exchange’s open-outcry trading floor, the last such venue in Europe, causing a backlash among some members which resulted in a compromise to keep it open.

Chamberlain, 40, also led sweeping reforms aimed at eliminating logjams in warehouses that collect rent for storing metal and launching new contracts for metals used in electric vehicles.

“We thought Matt was in for the long haul. They need to do something about volumes,” a metal industry source said.

The 145-year-old LME reopened its physical trading ring in September after the pandemic forced its closure in 2020. It adopted a hybrid system with open outcry used for official prices and its electronic system for closing values.

Adrian Farnham, currently head of LME Clear, will take over as interim CEO in May, while a permanent replacement for Chamberlain is sought, the exchange said in statement.

Farnham, who worked at Morgan Stanley for 13 years and was appointed chief executive of the LME’s clearing house in 2016, has more than 30 years of experience in financial markets and market infrastructure, the LME, which was bought by Hong Kong Exchanges and Clearing (HKEx) in 2012, said.

LME trading activity has been on a downward trajectory for years due to competition from COMEX and the Shanghai Futures Exchange, falling 6% last year.

“If they try to get rid of the date structure, they will have nothing that differentiates them from the CME. LME can’t compete with the CME where financial players are concerned,” the industry source said.

The LME’s date structure offers standard one- and three-month contracts, but users can also trade daily out to three months and forwards are available for those who want to trade for several months or two to three years down the line.

Standardised monthly futures on the CME allow funds and traders to settle a trade as soon as it is closed, while settlement on LME takes place every third Wednesday.

(Reporting by Zandi Shabalala; additional reporting by Pratima Desai;Editing by David Goodman, Kirsten Donovan and David Evans)

Key events while Chamberlain was CEO of London Metal Exchange

LONDON (Reuters) – Chief Executive of the London Metal Exchange (LME) Matt Chamberlain will step down in April to pursue interests outside the exchange, the LME said on Friday.

Since becoming CEO in April 2017, he has overseen wide-ranging changes at the 145-year-old exchange, the world’s oldest and largest market for industrial metals.

SEPTEMBER 2021

LME reopens its open outcry trading floor, the last such venue in Europe, closed in March 2020 for the first time since World War II due to COVID-19 restrictions.

JULY 2021

LME launches six new cash-settled future contracts, including battery metal lithium, hoping to attract new business from the global move to cut carbon emissions.

JUNE 2021

The LME abandons proposals to permanently close its open outcry trading floor after a backlash among some members, announcing a hybrid model using open outcry for official prices but its electronic system for closing activity.

JANUARY 2021

LME proposes to close its open outcry trading floor and shift permanently to electronic trading, launching a consultation. Chamberlain said the move would allow a broader range of participants and boost transparency of prices used as benchmarks around the world.

DECEMBER 2020

The LME said it will forge ahead with plans to support sustainable metal production starting with the roll-out by mid-2021 of a digital register to store carbon related details of aluminium.

JULY 2019

LME publishes proposals to reform its network of warehouses, aiming to attract more metal and improve transparency by requiring owners to report metal they plan to put on LME warrant.

MAY 2019

Gay Huey Evans is elected Chairman of the Board of LME, the first woman in the post.

JULY 2017

The LME and World Gold Council launch LMEprecious for the trading and central clearing of precious metals products.

APRIL 2017

Hong Kong Exchanges and Clearing Ltd, which owns the LME, announces the appointment of Chamberlain as chief executive. He joined the exchange in 2013 as head of business development and later served as chief operating officer.

(Reporting by Eric Onstad; Editing by Kirsten Donovan)

LME’s outgoing boss Matt Chamberlain takes CEO role at Komainu

LONDON (Reuters) – The London Metal Exchange’s (LME) outgoing chief executive, Matt Chamberlain, has taken the top job at digital asset custody services provider Komainu, his new employer said on Friday.

The announcement comes after Chamberlain, a 40-year-old former banker, quit his role at the world’s largest market for industrial metals after nine years there.

(Reporting by Zandi Shabalala; Editing by David Goodman)

Marketmind: The bears are taking control

A look at the day ahead from Dhara Ranasinghe.

The S&P 500 looks set to end the week down almost 4% in its biggest weekly drop since late 2020. Trade in futures suggest no reprieve from the pain stocks globally are feeling now.

Angst that the U.S. Federal Reserve could slam on the brakes faster than anticipated to contain sticky inflation continue to dominate world markets.

And Netflix forecasting weak first-quarter subscriber growth after the close of markets on Thursday, sending its shares sinking almost 20%, doesn’t bode well for the Nasdaq. After all the tech-heavy index closed Wednesday more that 10% below its November all-time high, confirming it was in a correction. [.N]

Add geopolitical risk into the mix, with tensions over Ukraine soaring, and it’s not hard to see why the bears have their claws out this morning.

European equity futures are down sharply and Asian stocks markets shed around 1%. Risk off is evident across other markets, with the Aussie dollar and cryptocurrencies taking a beating.

Back to inflation for a minute: Friday data shows even Japanese inflation rose 0.5% in December from a year earlier, up for a second month running at the fastest pace in nearly two years in a sign of broadening inflationary pressure from rising fuel and raw material costs.

U.S. Treasury Secretary Janet Yellen said on Thursday she was confident the Fed and the Biden administration would take steps needed to bring down inflation during 2022.

One market not feeling the inflation angst are sovereign bonds. Germany’s Bund yield is back below 0% and U.S. Treasury yields are down 5 basis points early in London. After all investors need somewhere safe to hide from carnage elsewhere.

Key developments that should provide more direction to markets on Friday:

– Top diplomats for U.S., Russia meet in Geneva on soaring Ukraine tensions

– Rio Tinto shares plunge as Serbia pulls plug on its $2.4 bln lithium project

– UK retail sales slump in December after early Xmas shopping, Omicron spread

– Euro zone flash consumer confidence

– ECB president Christine Lagarde speak at Davos

– ECB bank supervisor Edouard Fernandez-Bollo

– Bank of England’s Catherine Mann speaks

– Emerging markets: Pakistan, Kazakhstan

– US earnings: Schlumberger Graphic: S&P 500 stock index set for biggest weekly fall since late 2020, https://fingfx.thomsonreuters.com/gfx/mkt/byvrjmylyve/MB2101.png

(Reporting by Dhara Ranasinghe, editing by Karin Strohecker)

Serbia revokes Rio Tinto lithium project licences amid protests

By Ivana Sekularac

BELGRADE (Reuters) -Serbia revoked Rio Tinto’s lithium exploration licences on Thursday, bowing to protesters who opposed the development of the project by the Anglo-Australian mining giant on environmental grounds.

Serbian Prime Minister Ana Brnabic said the government’s decision came after requests by various green groups to halt the$2.4 billion Jadar lithium project which, if completed, would help make Rio a top 10 lithium producer.

“All decisions (linked to the lithium project) and all licences have been annulled,” Brnabic told reporters after a government session. “As far as project Jadar is concerned, this is an end.”

Earlier this week, Rio had pushed back the timeline for first production from Jadar by one year to 2027, citing delays in key approvals.

Rio Tinto said it was “extremely concerned” by Serbia’s decision and was reviewing the legal basis for it.

The company committed to the project just last year, as global miners pushed into the metals needed for the green energy transition, including lithium, which is used to make electric vehicle batteries.

The mine was slated to produce enough lithium to power 1 million electric vehicles, in addition to boric acid, used in ceramics and batteries, and sodium sulphate, used in detergents. At full capacity, the mine was expected to produce 58,000 tonnes of refined battery-grade lithium carbonate per year, making it Europe’s biggest lithium mine by output.

Brnabic accused Rio Tinto of providing insufficient information to communities about the project. In a statement, Rio said “it had always operated in compliance” with Serbian laws.

Thousands of people blocked roads last year in protest against the government’s backing of the project, demanding Rio Tinto leave the country and forcing the local municipality to scrap a plan to allocate land for the facility.

Thursday’s decision comes as Serbia approaches a general election in April and as relations between Belgrade and Australia have soured after Sunday’s high-profile deportation of tennis star Novak Djokovic from Australia over the country’s COVID-19 entry rules.

Djokovic himself spoke out in support of “clean air” in a December Instagram story post captioning a picture of the protests, which was published by digital sports platform The Bridge.

Twitter users were quick to joke about Rio being deported from Serbia.

Serbia’s populist ruling coalition, led by the Serbian Progressive Party (SNS), had initially showed support for lithium and copper mining, a stance that made it come under fire, helping erode the comfortable majority the party enjoyed in a 2020 vote.

Sasa Djogovic of the Belgrade-based Institute for Market Research said the ruling party “is losing popularity and because of that it is forced to fulfil the demands by activists.”

The SNS-led coalition is expected to hold parliamentary and presidential elections on April 3, although the date is yet to be officially confirmed by President Aleksandar Vucic.

“We are listening to our people and it is our job to protect their interests even when we think differently,” Brnabic said on Thursday.

The Jadar project, one of Serbia’s biggest foreign investments, was part of government efforts to draw in investment and boost economic growth. But environmental groups in Serbia, which has been heavily scarred by industrial pollution, say the new mine will pollute land and water in area.

Earlier this month, Brnabic had said the project would be likely paused at least until after the elections.

“A compromise will be probably reached after the elections, so that there could be a renegotiation of royalties or value-sharing,” said a Rio Tinto shareholder, who declined to be named.

The project was technically complex with Rio developing technology to economically extract lithium from jadarite, a mineral that has only been found in Serbia’s Jadar valley.

“Serbia historically is not a mining jurisdiction and I don’t see how anyone else would have a go,” said analyst Ben Davis at Liberum.

(Additional reporting by Clara Denina in London; editing by Amran Abocar, Jonathan Oatis and Marguerita Choy)

Huge explosion in Ghana mining region kills residents, fells buildings

By Eliasu Mohammed

ACCRA (Reuters) -An explosion in Ghana’s rural Western Region on Thursday razed hundreds of buildings and killed an unknown number of residents when a truck carrying explosives to a gold mine collided with a motorcycle.

Unverified videos posted on local media showed a large, smouldering blast site in which buildings had been reduced to piles of wood, brick and twisted metal.

In one video, two bodies are seen crumpled on the ground, covered in dust. A photo shared by a local council member showed a deep crater at the epicentre of the blast, onlookers peering down from its rim.

Seji Saji Amedonu, deputy director general of the National Disaster Management Organisation, said 500 buildings had been destroyed. A regional emergency official told local media he had seen 10 dead bodies.

“The public has been advised to move out of the area to nearby towns for their safety while recovery efforts are underway,” the police said in a statement.

Nearby towns have been asked to open up public spaces including classrooms and churches to survivors, the police said.

The explosion occurred in Apiate between the towns of Bogoso and Bawdie when a motorcycle went under a truck carrying explosives owned by a company called Maxam that was en route to the Chirano gold mine, run by Toronto-based Kinross.

A Kinross spokesperson confirmed the incident, saying it occurred 140 kilometres (87 miles) from the mine.

The police initially said the explosives were heading from the Tarkwa gold mine run by Johannesburg-based Gold Fields, but a spokesman for Gold Fields said the delivery was from an explosives company in the town of Tarkwa, not the Tarkwa mine. Maxam did not respond to requests for comment.

Ghana President Nana Akufo-Addo tweeted he had been informed of the incident and confirmed there had been deaths.

“It is a truly … tragic incident, and I extend, on behalf of Government, deep condolences to the families of the deceased,” he said.

(Reporting by Eliasu Mohammed in AccraAdditional reporting by Christian Akorlie, Cooper Inveen and Helen Reid; Writing by Edward McAllisterEditing by Bate Felix, Leslie Adler and Matthew Lewis)

U.S. trade chief Tai says world can’t return to 2019 trading system

(Reuters) -U.S. Trade Representative Katherine Tai said on Thursday that global trade policy makers should not try to recreate the pre-pandemic trading system but build one that is more resilient, sustainable and supportive of higher living standards.

Speaking in a virtual panel of the World Economic Forum, Tai cautioned against a backward-looking “return to normalcy” after two years of COVID-19-induced disruptions.

“I think that it is time for us to acknowledge that our goal really shouldn’t be to try to go back to the way the world was, say in 2019, but to take lessons, very hard earned lessons, very painful lessons that we have experienced over the past two years and take this opportunity to build toward something that is different and better,” Tai said.

Key to this will be to strengthen and diversify supply chains, she said.

The chairman of ports giant DP World, Sultan Ahmed bin Sulayem told the forum it could take up to two years to return to normal once the pandemic ends.

Intel Corp chairman Pat Gelsinger, addressing the same forum, said the pandemic showed a clear need for more resilient and diversified supply chains. This should include their stress-testing for critical components the way stress-testing of financial institutions improved after the 2008-2009 financial crisis.

He said Intel was striving, with the help of U.S. and European incentives for re-shoring of chip manufacturing, for a “globally distributed, resilient supply chain where no market is uniquely dependent on any other supply, or any singular location, but there’s also always a duplicity of supply chains available across the globe.”

World Trade Organization Director-General Ngozi Okonjo-Iweala told the forum current disruptions in the global economy presented an opportunity to diversify supply chains to developing countries that have not benefited from previous waves of globalization.

“We see shifts to Vietnam, Laos, Cambodia, Bangladesh, Ethiopia and so on in our data and I call it a way of re- globalizing and using this globalization and supply chain to solve some of the inequality problems,” Okonjo-Iweala said.

(Reporting by David Lawder, Phil Blenkinsop and Alexander Cornwell; Editing by Franklin Paul and Tomasz Janowski)

Vedanta to create $10 billion fund to bid for BPCL stake, other assets – chairman

By Saeed Azhar

DUBAI (Reuters) – Mining firm Vedanta Resources Ltd plans to create a $10 billion fund to bid for assets including the Indian government’s stake in Bharat Petroleum Corp Ltd (BPCL), its chairman told Reuters on Thursday.

The Indian government is seeking to privatise state-run refiner BPCL by selling its near 53% stake in the firm, worth just over $6 billion, to private entities.

“We are in the process of creating a fund of $10 billion,” Anil Agarwal said in an interview in Dubai. “It will not only look at (BPCL) but there are other companies being privatised. It will look at the potential of those companies also.”

The fund will be made up of its own resources and outside investment, Agarwal said, adding that it may also finance the BPCL acquisition through debt.

“We will work out a structure, we are doing the due diligence,” he said. “As soon as the date comes, we will firm up and work out on how we take the money and go about it.”

“There is no large fund which does not want to associate with us in general. Money will never be a problem,” he added.

London-headquartered Vedanta Resources, founded by Agarwal in 2003, has grown its annual revenues from $1 million to over $15 billion in the past decade.

As well as its operations in India, the group has mining interests in South Africa and a precious metal refinery and copper rod plant in the United Arab Emirates’ Fujairah Free Zone.

It is also exploring opportunities for new zinc, gold and magnesium mines in Saudi Arabia. Agarwal said $2 billion worth of investment will be required to tap opportunities in the kingdom.

“They (Saudi Arabia) are coming out in March with full details,” he said. “They are inviting very serious, interested people to come and participate and look at joint ventures.”

Agarwal also said the company aims to become zero-carbon by 2050, and will invest $5 billion in the medium term to reduce its carbon footprint.

(Reporting by Saeed Azhar; Editing by Jan Harvey)

Marketmind: “Moving in” (on stock market bargains)

A look at the day ahead from Sujata Rao.

Prospects for war just do not bother markets the way they used to. U.S. President Joe Biden reckons Russia intends to “move in” on Ukraine, and even sowed doubt over whether the West would retaliate against any “minor incursion”.

Yet buyers have stepped in to lift MSCI’s world stocks index after two days of falls, that saw the mighty Nasdaq enter “correction” territory, essentially a 10% fall from recent peaks.

Wall Street, for the time being at least, appears set for a bounce, with Nasdaq futures up around 0.7%. And yields on “safe” bonds from Germany and the United States are moving up again after a late-Wednesday pullback.

Reasons for the regular dip-buying are well-documented — abundant cash, negative inflation-adjusted rates, robust company earnings. And China’s first mortgage reference rate cut in nearly two years, shows that policy-tightening in the developed world may be offset at least by Beijing’s actions.

And despite this month’s hectic bond selloff, a reminder that yields on a global debt benchmark, the Bloomberg Barclays Multiverse (7-10 years) have only just risen above 2%.

Finally, all around are signs the world economy is emerging from the Omicron knock back of late-2021 and supply chain delays continue to ease. Japan’s exports and imports in December hit record highs in terms of their value in yen

Finally, so tight are labour markets in parts of the world that Australia even mulled letting 16-year olds drive forklift trucks, a proposal that’s been put on ice, some may say fortunately. But the day may yet come.

Graphic: Bloomberg Multiverse, https://fingfx.thomsonreuters.com/gfx/mkt/myvmnbrewpr/Pasted%20image%201642630206915.png Key developments that should provide more direction to markets on Thursday:

-More geopolitics; China said it warned away a U.S. warship and North Korea suggested it may resume nuclear and missile tests.

-Norway central bank announces interest rate decision at 0900 GMT (expect a hold)

-Euro zone inflation will decrease gradually, Lagarde says

-Philadelphia Fed Survey for January

-POLL-Turkish cenbank to halt easing

-Central banks also meet in Malaysia, Indonesia, Sri Lanka, Ukraine

-Final Euro zone HICP Dec, ECB Dec minutes due out

-US initial jobless claims/existing home sales

-US 10-year TIPs auction

-US earnings: Northern Trust, Union Pacific, Netflix, American Airlines

(Reporting by Sujata Rao; editing by Dhara Ranasinghe)

U.S., UK launch talks to resolve steel, aluminum dispute; U.S. producers wary

By David Lawder and David Shepardson

WASHINGTON (Reuters) -The United States and Britain on Wednesday agreed to start talks aimed at resolving their trade dispute over U.S. steel and aluminum tariffs, the countries said in a joint statement.

No specific date or timeline was given for the talks but discussions will address “global steel and aluminum excess capacity, including the United States’ application of tariffs” on the metals from Britain.

“Both parties are committed to working towards an expeditious outcome that ensures the viability of steel and aluminum industries in both markets,” the joint statement https://www.commerce.gov/news/press-releases/2022/01/joint-united-states-united-kingdom-statement-addressing-global-steel said.

They said the talks also will cover the UK’s 25% retaliatory tariffs on U.S. products, which include whiskey, motorcycles, blue jeans and tobacco. Annual exports of U.S. whiskey to Britain have fallen by more than half since 2018, according to the Distilled Spirits Council, which welcomed the announcement.

A spokesperson for Britain’s trade ministry said: “Until a deal is done we will continue to apply rebalancing measures on U.S. products, and won’t hesitate to take any action necessary to defend our vital steel and aluminium industries.”

The joint statement was issued after a virtual meeting between U.S. Commerce Secretary Gina Raimondo and UK Secretary of State for International Trade Anne-Marie Trevelyan to discuss the tariffs. U.S. Trade Representative Katherine Tai also signed onto the joint statement.

U.S. STEELMAKERS WARY

Britain is keen to negotiate duty-free access to American steel and aluminum markets similar to that granted by Washington to the European Union on Jan. 1 as part of a quota deal https://www.reuters.com/world/us-eu-expected-announce-deal-ending-steel-aluminum-tariff-dispute-sources-say-2021-10-30 reached last October that took six months to negotiate.

The metals tariffs – 25% on steel and 10% on aluminum – were first imposed in March 2018 by former U.S. President Donald Trump under the “Section 232” national security law to protect U.S. producers from subsidized imports.

U.S. steelmakers cautioned against the UK negotiations and similar talks with Japan leading to substantial additional volumes after a nearly 50% jump in imports last year.

“We think it is essential that the administration ensures that the various new agreements it is considering do not result in a flood of imports,” said American Iron and Steel Institute President Kevin Dempsey.

Philip Bell, who heads the Steel Manufacturers Association, said Britain’s steel production is “highly export oriented” and dominated by Chinese and Indian ownership.

“The U.S. government should be concerned about any additional alternative arrangement that will lead to increased steel imports and support countries not committed to free and fair trade,” Bell said in a statement.

Raimondo and Trevelyan agreed to work to address global excess capacity in steel and aluminum production largely centered in China – a goal included in the U.S.-EU agreement.

The announcement of talks coincides with a sensitive time politically for British Prime Minister Boris Johnson, whose leadership is under threat after a series of revelations about COVID lockdown breaches at his residence.

If that crisis develops into a formal leadership challenge, it could paralyze decision making within government for several weeks and limit ministers’ mandate to negotiate the concessions needed to reach a compromise with the United States.

(Additional reporting by William James in London; writing by David Lawder and Susan Heavey; editing by Alexandra Hudson, Marguerita Choy)

Aurubis posts 85% quarterly profit surge, raises earnings outlook

HAMBURG (Reuters) – Aurubis AG, Europe’s largest copper producer, on Wednesday posted an 85% rise in quarterly earnings and raised its full year forecast, helped by strong demand and high metals prices.

Aurubis said in an advance of its earnings release that operating earnings before taxes (EBT) in the first quarter to end December rose to 152 million euros ($172 million) from 82 million a year previously.

It raised its full year operating EBT forecast to a range of 400 million to 500 million euros from 320-380 million euros previously.

“In the first quarter …Aurubis demonstrated a very good operating performance at the sites of its smelter network,” said CEO Roland Harings.

It achieved considerably higher revenues from sulphuric acid sales and improved metals earnings, especially for industrial metals copper, tin, nickel and zinc, with increased metal prices, said Harings.

Copper prices hit three-month highs in early January.

From January 1, 2022, Aurubis was also achieving roughly 10% higher treatment and refining charges (TC/RCs) for copper concentrates, Harings said.

Miners pay TC/RCs to smelters to process their copper concentrate (ore) into refined metal. Reuters reported in December that Chinese smelters are achieving higher TC/RCs on the year as copper demand rises.

Firm refining charges for recycling scrap materials, a significantly higher copper premium, stronger demand for copper products and substantially increased sulphuric acid prices will have a positive impact on the full-year result, Aurubis said.

“We also have a high level of hedging and countermeasures in place which will protect us to a great extent from the impact of increased energy costs,” a spokesperson added.

Aurubis will announce full first quarter results on Feb.7.

(Reporting by Michael Hogan, ; editing by John Stonestreet)

LME notes tight nickel market, monitoring prices

LONDON (Reuters) – The London Metal Exchange said on Wednesday it was monitoring nickel prices, which have soared due to tight supplies, robust demand from electric vehicle battery makers and large draws on stocks.

The premium or backwardation for tom/next — buying tomorrow and selling the day after — jumped to $90 a tonne on Tuesday, its highest since 2010. It was trading around $2 a tonne on Wednesday.

The premium for the cash over the three-month nickel contract was around $370 a tonne compared with a 13-year peak of $495 a tonne on Tuesday.

The benchmark three-month nickel price climbed to $22,935 last week, the highest since August 2011.

“The LME notes the current tightness in the nickel market,” the exchange said in response to a request for comment.

“We are undertaking enhanced monitoring in respect of nickel market activity and we have further options available to ensure continued market orderliness if these are required.”

Nickel inventories in LME approved warehouses at 94,830 tonnes have fallen around 65% since April last year.

About 50% of the total is bagged briquette, easily crushed into small particles and dissolved in sulphuric acid to make nickel sulphate used for batteries.

(Reporting by Pratima Desai; editing by xxxx)

Marketmind: Goldman Sachs adds another layer of stress

A look at the day ahead from Julien Ponthus.

For all the turmoil across financial markets yesterday, the Nasdaq creeping dangerously near correction territory and closing below a key 200-day moving average probably came as the least surprising feature for investors.

After all, dumping expensive tech and growth stocks when bond yields rise as the Federal Reserve embarks on an interest hike cycle is seen as basic stock market trading 101.

Going overweight on banking stocks on tighter monetary policy is another common trade but that one backfired spectacularly when Goldman Sachs missed quarterly profit expectations and plunged 7% as rising expenses bit into its fourth quarter earnings.

Traders are now waiting for Bofa and Morgan Stanley to update the market today and see whether the key theme of this new earnings season might just be rising costs, including pay, denting profits across all industries.

With European and U.S. stock futures down over 0.5%, it’s fair to say there’s palpable uncertainty on that front as other structural forces of this tightening cycle are only gaining strength in these early days of 2022.

The dollar is pumped up against rival currencies with benchmark U.S. Treasury yields trading on two-year highs as the Federal Reserve shows signs of being more aggressive in tackling inflation while in Europe, Germany’s 10-year bond yield rose above 0% for the first time since May 2019.

Moreover, latest data showed British consumer price rose to 5.4% in December, its highest since March 1992, a level which might encourage the Bank of England to speed up tightening.

Even the cautious Bank of Japan warned investors that inflation may accelerate faster than expected if raw material costs continue to spike.

This came as oil prices are up for a fourth day to levels last seen in 2014 as an outage on a pipeline from Iraq to Turkey increased concerns about an already tight supply outlook.

Graphic: Bund, https://fingfx.thomsonreuters.com/gfx/mkt/gdpzykgqwvw/Pasted%20image%201642577918037.png

Key developments that should provide more direction to markets on Wednesday:

-UK inflation rises to highest in nearly 30 years

-German harmonised inflation +5.7% y/y in December

US housing starts

US 20-year treasury auction

US earnings: Bofa, State Street Morgan Stanley, Proctor and Gamble, Bancorp, Alcoa

Central Banks: BoE Governor Bailey and Deputy Governor Cunliffe speak

Swiss National Bank Vice Chair Fritz Zurbrugg, speaks (This story fixes redundant word in third paragraph)

(Reporting by Julien Ponthus)

BHP flags labour constraints, warns of further Omicron disruption

By Indranil Sarkar and Shashwat Awasthi

(Reuters) -Mining giant BHP Group on Wednesday joined rival Rio Tinto in warning of further disruptions from COVID-19, including labour shortages, and said the impact of the Omicron variant will last into the second half of its financial year.

BHP said the proposed easing of border restrictions in Western Australia on Feb. 5 may also cause some short-term disruption to the operating environment as the pandemic evolves in the state.

The mineral-rich state has maintained a hard-line on border controls during the pandemic, while a surge of Omicron cases across Australia has caused a dearth of workers in mines as well as train drivers to transport millions of tonnes of commodities.

With the country in the grip of an Omicron wave, BHP’s production of some commodities fell in the December quarter. Labour constraints and wet weather also forced the global miner to cut its annual forecast for metallurgical coal.

“Workforce absenteeism arising from the COVID-19 Omicron variant is anticipated to continue into the early part of the second half of the 2022 financial year,” the company said.

Rio Tinto forecast slightly weaker-than-expected 2022 iron ore shipments on Tuesday, partly due to tight labour market conditions.

Still, BHP’s second-quarter iron ore production from Western Australia rose 5% to 73.9 million tonnes, helped by strong performance at its Jimblebar mine and ramped up production at its $3.6-billion South Flank project.

“With iron ore driving so much of the cash flow, the impact from today’s result should be relatively muted considering the relative strength there will likely help to offset downgrades elsewhere,” RBC Capital Markets analyst Kaan Peker said.

BHP shareholders are set to vote on Thursday on whether to unify its structure, bringing its dual-listing in London within a single Australia-listed company.

The miner’s shares were flat by 0335 GMT, while the broader market fell 0.9%.

(Reporting by Indranil Sarkar and Nikhil Kurian Nainan in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)

U.S., UK to announce plans for formal talks on metals tariffs on Wednesday -sources

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) – The United States and Britain are expected to announce plans on Wednesday to launch formal talks aimed at resolving a long-running trade dispute over U.S. steel and aluminum tariffs, two people familiar with the plans said.

The announcement will come as part of a virtual meeting on the metals tariffs between U.S. Commerce Secretary Gina Raimondo and UK Secretary of State for International Trade Anne-Marie Trevelyan, the sources told Reuters.

The two sides are not expected to announce a specific timeline for the talks nor a specific deadline for reaching an agreement, added one of the sources.

A U.S. Commerce Department spokesperson declined to comment on the announcement plans, and a spokesperson for the British embassy in Washington did not respond to a Reuters query about the talks.

Reuters reported last week that Raimondo and Trevelyan would speak virtually about the U.S. metals tariffs this month after the Commerce Department said that Raimondo was not in a position to travel to London for talks.

U.S. Trade Representative Katherine Tai said last week that the Biden administration had begun talks with Japan over the steel and aluminum tariffs but that discussions with Britain would start “when the time is right”, without providing details.

Both Britain and Japan are keen to reach duty-free access to American steel and aluminum markets similar to that granted to the European Union on Jan. 1 as part of a quota deal reached with Washington last October.

The metals tariffs – 25% on steel and 10% on aluminum – were first imposed in March 2018 by former President Donald Trump on national security grounds and have been a major transatlantic trade irritant since then.

Britain adopted the EU’s retaliatory tariffs on U.S. whiskey, motorcycles, blue jeans, tobacco and other products when it left the bloc at the start of 2021.

The EU dropped these retaliatory tariffs as part of its deal with the United States, which lifts tariffs on about 4 million tons of steel “melted and poured” in the bloc annually, with duties applied to higher volumes.

The U.S. and EU are pursuing a further agreement to curb global steelmaking with high carbon emissions, a goal aimed partly at curbing China’s coal-fired excess steel output.

(Additional reporting by David Shepardson in Washington; Editing by Jacqueline Wong and Raju Gopalakrishnan)

Stocks sink, notably tech, as Treasury yields jump

By Herbert Lash and Marc Jones

NEW YORK/LONDON (Reuters) – Benchmark U.S. Treasury yields jumped to two-year highs and equity markets tumbled on Tuesday, with the Nasdaq falling more than 2%, as traders braced for the Federal Reserve to tackle fast-rising inflation by tightening monetary policy.

The dollar hit a six-day high as Treasury yields surged, while inflation fears were bolstered as oil prices rose to their highest since 2014 on possible supply disruptions after attacks in the Gulf increased an already tight outlook.

The jump in Treasury yields slammed U.S. and European technology stocks, while a drop in Goldman Sachs’ stock led declines among U.S. banks after it missed quarterly earnings as the Fed slowed its asset purchases in November.

Two-year Treasury yields, which track short-term interest rate expectations, rose above 1% for the first time since February 2020 as traders priced in a more hawkish Fed before the U.S. central bank’s policy meeting next week.

The two-, three- and five-year part of the yield curve will bear the brunt of expected Fed policy, said Tom di Galoma, a managing director at Seaport Global Holdings in Greenwich, Connecticut.

“The front end of the market is still way underpriced for Fed tightenings. The two-year note could be 1.5% by March,” he said.

The yield on two-year Treasuries rose 8.4 basis points to 1.051% and on 10-year Treasury notes they climbed 10.2 basis points to 1.874%, a yield last seen that high in early January 2020.

Yields have jumped since minutes from the Fed’s December policy meeting showed it may raise rates sooner than expected and begin reducing its asset holdings to slow inflation and address a tight labor market.

Information technology was the biggest percentage declining sector on Wall Street, losing 2.48%, with interest rate-sensitive financials the second biggest, down 2.27%.

Tech stocks also weighed the most in Europe, falling 2.2%, as European shares fell to their lowest level in more than a week. The pan-European STOXX 600 index fell as much as 1.44% before paring some losses to close down 0.97%.

Securities will continue to revalue as the market anticipates rate hikes, said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

“We still have a bit of a ways to go to prepare for three rate hikes or four rate hikes. We haven’t priced that in,” he said.

On Wall Street, the Dow Jones Industrial Average slid 1.51%, the S&P 500 fell 1.84% and the Nasdaq Composite slipped 2.60% to close almost 10% below its record closing high on Nov. 19, which would confirm a correction.

MSCI’s all-country world index closed down 1.57% as tech stocks dropped in Asia overnight despite China easing policy again.

Investors are increasingly pricing in as many as four Fed rate hikes this year, with the first seen coming in March, and one from the European Central Bank.

Big market declines often occur in years following outsized gains on Wall Street, with nine sell-offs starting in the first quarter that averaged 10.9% since World War Two, said Sam Stovall, chief investment strategist at CFRA Research.

However, “history is a great guide, but it’s never gospel,” he said.

Oil was the only positive sector on Wall Street as Brent crude prices hit $88 a barrel after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.

Brent crude futures rose $1.03 to settle at $87.51 a barrel. U.S. crude futures settled up $1.61 at $85.43 a barrel.

Gold prices fell. U.S. gold futures settled down 0.2%at $1,812.40 an ounce.

Japan’s yen initially fell after the Bank of Japan said it would stick to its ultra-loose monetary policy, despite hopes the economy is finally kicking clear of deflation.

The yen was last down 0.01% at $114.5900. The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.523% to 95.749 and the euro was last down 0.74%, at $1.1323.

Russia’s rouble, highly volatile recently, firmed 1.18% to 76.9395 a dollar after reports the West was no longer considering cutting Russian banks off from the Swift global payments system and was instead eyeing sanctions on banks.

(Reporting by Herbert Lash, additional reporting by Sinéad Carew in New York and Marc Jones in London; Editing by Chizu Nomiyama, Jonathan Oatis and Chris Reese)